Government releases new NBN plan

NBN Co’s shareholder ministers, Communications Minister Malcolm Turnbull and Finance Minister Senator Mathias Cormann, have issued an interim Statement of Expectations to the company as the first step in implementing changes to government policy.

The interim statement will guide NBN Co’s construction and operational activities pending changes to the board and while a strategic review and independent audit of the project is carried out and a new NBN Co corporate plan is drafted. The statement instructs NBN Co to continue to roll out the network as rapidly and cost-effectively as possible throughout this process.

It also provides NBN Co with the flexibility to use a wider range of technologies to connect businesses and homes to the network. For example, this will allow NBN Co to trial the latest VDSL technology to deliver superfast broadband to homes and businesses in multidwelling units such as apartment blocks. In the short term, the statement is expected to see the NBN Co meet its contractual obligations by continuing to roll out fibre to the premises while the company conducts the strategic review of the project.

The NBN Co has recently advised the government that it is proposing to revise its rollout target for premises passed by fibre by 30 June 2014 down by almost half from the forecast made four months ago.

A key priority will be to reduce the backlog of 66,000 premises passed by the NBN fibre network which cannot currently obtain service. This includes the majority of apartments, schools and businesses in areas where the fibre network has been rolled out. Under the interim Statement of Expectations, construction will be completed in areas containing 300,000 premises where construction contracts have been signed. 

Detailed network design work is underway in areas containing a further 645,000 premises. In geographic areas where NBN Co is in a position to hand over final designs to construction partners, some of these sites may see construction work begin shortly.

There are also more than 900,000 premises listed on the one-year rollout plan on the NBN Co website where only preliminary network design work is underway. Decisions about actual construction in these areas will be taken after the reviews into the NBN rollout are completed. These decisions will ensure there is a steady flow of work on the NBN until well into 2014. This will provide certainty for contractors and ensure they do not have to demobilise workforces.

The government expects this period of review will lead to revisions to the timing of the rollout and to updated forecasts. The government is mindful of the fact that the NBN rollout has, to date, repeatedly missed its targets.